Posts tagged ‘spending’

Simple Budget Cuts you didn’t Think about which could Save you Thousands a Year

We are all feeling the pinch from inflation these days, but some probably more than others, depending on their budgets, income, lifestyle etc. To keep things simple, all you can do is to control what is in your control and that starts with what you spend your money on. Let us go through some items that are a bit easier to eliminate or simply reduce, which may not not be as obvious to some:

Drive less and save on gas

I have been doing this for well over a year now. On average I have been driving 10-20% less per week and that translates into significant savings on my gas budget. I try to do multiple things per trip and schedule our kids errands and activities to be close to each other when possible, especially since they occur on a weekly or daily basis. I also eliminated it cut down on my leisure and rural driving. Of course, by driving less, you not only save on gas, but reduce the wear and tear on the car and save on mileage. Compared to previous years for example, my average annual mileage is down by about 18%.

Cut or reduced monthly subscriptions and memberships

This is a big one, and although each on their own may not seem like a lot , they can quickly add up. Let us go through some common ones (I have our estimates for what each may cost) . As you can see , eliminating just 2-3 of those could save you over $50 a month or $600+ a year.

  • Netflix: $18-20
  • Spotify: $20
  • Amazon Prime membership : $15
  • Magazine or paper subscriptions : $30
  • Gaming pass: $30
  • Monthly app subscriptions: $10
  • GYM membership if you rarely use it: $50

Cut down on dining out and food delivery

This is a big one and can add up even if you don’t do it often. First off, when you order from these various food delivery apps such as DoorDash and UberEats, you are effectively paying a 25% premium when you include the higher cost for the delivery menu, surcharges, delivery and other fees, and tip for the driver. Same applies to dining out where it can get quite expensive, especially if you are taking a full family. Reducing it to just one delivery or dine-out trip a month will save you a lot of money, especially if this is something you do on a weekly basis. This also includes buying lunch at work instead of brown-bagging it. It may be hard at first but you will quickly get used to it, especially when you see all the savings.

Set a budget when grocery-shopping and be strict about it

As prices have gone up as a result of inflation, and while we know we are spending more on groceries than before, we are not fully conscious that we may be paying 25% or more than we did before and that is a lot. And as mentioned before, since the price we pay is outside our control, we can at least control how much we are willing to spend. For example , if you are a family of 3, you can commit to spending no more than $150 every two weeks. As you start scanning your items, start with the essentials and as you get close to your budget limit, you can return the rest of the stuff that are yet to be scanned. In other words, your budget limit comes first and don’t have to scan and buy each item in the cart. Better yet, follow an old and popular advise to eat before you go grocery shopping, as it is psychologically proven to reduce how much you spend. In other words, getting groceries while you are hungry will induce more spending.

Travel should be off of your list for now

Unless it is already booked or you have gotten a deal that only comes once in a blue moon, best to put off that vacation for now. With everything costing more these days, that vacation will set you back hundreds or even thousands of dollars, money that could be much better spent on something much more important like paying down debt or saving.

Other luxury or big ticket items

During these expensive times, that Gucci, Michael Kors or whatever other expensive luxury brands out there can wait. Same goes with big ticket items like home furniture or appliances, unless you absolutely need one and can’t get by without. The idea is that as long as these are luxury wants, optional wish items, and not an urgent priority, the money is much better be saved for a rainy day.

Remember, it is not just inflation but a recession too which could end up costing you your job. Be prepared in case that happens, while hoping it never does. Either way, you will be prepared and in good shape. As the saying goes , better have it and not need it than need it and not have it.